Email this article to a friend

State Street, the US custody bank, has bulked up its offering in the $2.3 trillion (â¬1.77 trillion)-a-day foreign exchange business, after it paid $564m for a trading platform to boost its own in-house system.

The deal combines Currenex, which is used by hedge funds and investment banks, with State Street’s FX Connect, which matches 78% of foreign exchange traffic from institutional investment managers.

State Street said the acquisition of Currenex gives it the “most complete and diverse pool of FX liquidity in the market". Currenex said it was difficult to quantify its trading volumes.

Joseph Hooley, vice-chairman at State Street, said: "The future of global electronic foreign exchange trading will be determined by who can provide the most efficient technology solutions that allow quicker access to markets and flexible, comprehensive trading solutions."

The acquisition diversifies State Street's client base beyond long-only asset managers to include more active currency traders and hedge funds.

State Street's FX Connect, which last month traded over $108 billion in a single day, was the first multi-bank FX trading platform launched in 2000.

Currenex followed the State Street system in April 2000, but focused on active FX traders whereas FX Connect was targeted at State Street's traditional asset management customers.

Cliff Lewis, the chairman and chief executive of Currenex, said: "This move leverages the strengths of two innovators who share a similar strategic vision of creating best of breed and flexible electronic trading solutions."

State Street plans to run the trading platforms separately, rather than bringing them together.

Stanley Shelton, the executive vice-president of State Street, said: "The two platforms are extraordinarily complimentary with almost no overlap. Once this transaction closes, we will move quickly to integrate Currenex's technology with Global Link, our multi-asset class trading platform."